Abu Dhabi: The United Arab Emirates (UAE) economy, which has been ravaged by disruptions caused by the covid pandemic and lower crude prices, may shrink deeper than earlier estimates this year.
The gross domestic product (GDP) in the Arab world’s second largest economy, after Saudi Arabia, is likely to contract about 6% in 2020 against the previous forecast of a 5.2% decline, the UAE’s central bank said in its quarterly review on Tuesday. The economy may expand 2.5% next year.
The UAE central bank’s projections are slightly better than those from the International Monetary Fund (IMF), which sees a decline of 6.6% in 2020. The UAE economy last contracted by more than 5% in 2009, the IMF said.
The UAE central bank’s report said: “As an oil exporter, UAE is likely to feel the fallout from reduced global demand for oil due to contraction of economic activities, including transportation and international travel.”
“Real oil GDP is projected to contract in 2020, corresponding to an average oil production of 2.8 million barrels per day for the year as a whole,” the UAE central bank added in the report.